I bought one of these for $156 and you can get it cheaper.
http://www.buysku.com/wholesale/thl-w100-android-4-2-mtk6589…
Everything works straight out of the box. It's very smooth- loads quickly- web browsing is fine. Games work well though I can't imagine anyone playing games on a phone for long.
I see in the Antutu benchmark app I have that the Galaxy S4 and HTC One kill it but to what end? What is the point?
What's the point of getting the latest iPad with Retina when you can get an iPad 2 or the original iPad? What's the point of getting the latest gaming/entertainment rig when you can get a budget PC for a third of the price?
New phones generally come with improved technology, better specs, improved camera quality, improved sound detail, better development/support being a big brand, cool new funky features, etc. This all goes to improving user experience.
My dad uses a Huawei Y201 that he bought from Coles. He loved it until I brought home my HTC One. Little things, like the phone orientation rotating faster, the absolutely smooth operation with no lag whatsoever, 4G compatibility, etc - can ultimately can make a big difference. He still wouldn't pay 10 times the price for these improvements, but each to their own, I suppose.